Like the crude oil we convert to gasoline to run our automobiles, the newsprint on which this article is published is a scare resource today.
Publishing companies scrambled for supplies last year as inventories of newsprint reached the lowest level in seven years. Paper was found, in some instances from European manufacturers at prices nearly double the going rate in North America.
Now publishers have begun to build stocks of newspint before labor contracts expire April 30 for newsprint suppliers in Eastern Canada. In addition, newsprint prices have been boosted to a level that is about 25 percent higher than at the start of 1979, effective May 1.
Each metric ton purchased for newspapers will cost about $440 three months from now, and U.S. papers last year consumed 10.2 million metric tons, up 3 1/2 percent from 1978.
At first glance, these developments may not appear to have any particular importance in an economy where all costs are soaring. One factor in the spiral of newsprint prices, for example, is the cost of energy in a manufacturing process that consumes a lot of it.
But there are substantial implications for the future of the printed press is newsprint costs continue to climb hcarply. Newsprint costs already account for up to 40 percent of the operating expenses of larger newspapers and up to 25 percent of overall costs at smaller publications.
Since World War II, the weight and number of pages in an average newspaper more than doubled. This trend probably has been stopped.
Although new production plants planned or under construction in Canada and the United States are expected to meet projected needs of the newspapers, the cost spiral is likely to bring about fundamental changes.
Some fixtures, such as classified advertising, may disappear altogether -- with a resulting reduction in pages in some daily newspapers. Walter E. Mattson, recently named as president of the New York Times Co., has forecast a dual system of classified advertising dissemination that employs modern communications technology.
"Classified ads will be sold to be carried both by the newspaper and on a teletext system received in offices and homes on ordinary TV sets," he wrote in a preview of newspapers in the 1980s published by the journal of the American Newspaper Publishers Association.
"Not only will an advertiser be able to zone an ad neighborhood" -- limiting publication to issues distributed in one area -- "but the ad can be field-designed so that a prospect will be able to ask for all the "three-bedroom ranch homes with fireplace, pool and two-car garage under $100,000 in southeastern Centerville.'"
Another issue publishers will face is how to pass along the costs of higher newsprint. Subscription rates can be raised only so far before readers balk. Advertising accounts for the bulk of a newspaper's revenues (an average of about 75 percent) and occupies more than 60 percent of the newsprint in an average American newspaper. As ad rates increase to cover costs, some advertisers are forced to reduce the number of media outlets used. A process of growing selectivity reduces advertising business for weaker publications.
To some extent, however, the rush by newspaper publishers to use modern technology for daily publication is seen as providing help on the cost side of their business.
In a recent media industry forecast, the investment firm of Drexel Burnham Lambert Inc. found print growth will expand more rapidly than commercial television because home audiences are expected to become more fragmented with widespread use of cable and subscription entertainment. Magazine and newspaper production costs, exclusive of paper, should decline with installation of more efficient equipment at both the editorial and production departments of the print publications.
In the end, more diversity may be created for the public with editions targeted for specific audiences, opening up some pages to advertisers who cannot afford to buy a full press run and providing readers with content suited to their interests. (It is estimated that an average reader now looks at just 10 percent of a paper.)
But with thinner and more specialized newspapers possible, editors will join with publishers to tackle an even more fundamental question: How will readers who don't happen to fit into some preferred geographic or demographic group be served, in editions that don't attract advertisers?
And how will this be accomplished without weakening the economic base of that essential American institution -- the general readership newspaper?